Not every estate in Maryland is subject to the federal estate tax once the estate's owner passes away. Yet for those that are subject to such taxes, it is important to understand what is included as part of one's estate for tax purposes and what the value of the estate is.
According to the Internal Revenue Service, the gross estate includes anything the decedent owns upon their death. The value of the estate is not what the decedent paid for each item or the value of the item when it was acquired, but instead is calculated using the fair market value. Personal property, cash, real estate, trusts, insurance, securities, business interests and annuities may all be part of a person's gross estate. The gross estate is comprised not just of probate property, but of non-probate property as well.
That being said, there are some things that are excluded from the decedent's gross estate. For example, property that is owned only by the decedent's spouse will generally not be included in the decedent's gross estate. Complete lifetime gifts may also be excluded from the gross estate. In addition, a life estate that the decedent obtains from another individual in which they no longer have any control over are not considered a part of the decedent's gross estate.
It is important to understand what a gross estate consists of for tax purposes, and what the estate is worth. Calculating the fair market value can be complicated. In general the fair market value is that which a willing buyer and seller would exchange without being forced to do so and having a reasonable understanding of the item being valued.
Keep in mind that the above information is not meant to be legal advice, and is for general purposes only. Executors or property owners who have further questions about calculating fair market value or about gross estates in general may want to seek the advice of a professional.